paul flannery

What the lockout means for the NBA and the Celtics

What has been anticipated for more than two years became official on Friday morning as the NBA locked out its players. The league emailed a statement on Thursday, which explained the tangible effects of the lockout:

“During the lockout, players will not receive their salaries; teams will not negotiate, sign or trade player contracts; players will not be able to use team facilities for any purpose; and teams will not conduct or facilitate any summer camps, exhibitions, practices, workouts, coaching sessions, or team meetings.”

They also spelled out their position, attributed to NBA Deputy Commissioner Adam Silver:

“The expiring collective bargaining agreement created a broken system that produced huge financial losses for our teams. We need a sustainable business model that allows all 30 teams to be able to compete for a championship, fairly compensates our players, and provides teams, if well-managed, with an opportunity to be profitable.”

It’s either funny or sad that people hailed the broken system as a massive victory for the owners when it was hammered out following the last work stoppage in 1999 – and later tweaked in 2005. Buried in the league’s rhetoric are the key words: “well-managed.”

The question from the players is: Why should they be forced to pay for the sins of bad management? They have a point. Well-run small market teams have been able to compete at the highest levels over the last dozen years just as large market teams have spent their way into salary cap oblivion. However, it’s also true that teams that are willing to spend big money like the Lakers, Mavericks and Celtics have been able to remain competitive, while poorer teams in small markets have had a more difficult time rebuilding and a smaller window to build on their success.

As everyone who follows the league knows, it’s very difficult to rebuild a bad team quickly unless you A) get lucky in the lottery or B) clear enough cap space to either lure top free agents or swing a massive trade.

Additionally, once you build a winner it takes lots of money to sustain that success. Take a team like Oklahoma City that has drafted well and made a number of savvy trades. The Thunder look great now but there will be a price to pay once young players like Russell Westbrook, James Harden and Serge Ibaka are in line for new contracts.

Perhaps an even better illustration of the current system is a team like Indiana that went through a painful rebuilding process where it had to shed cumbersome contracts and is only now looking like a competitive team, albeit a competitive team that won 37 games and isn’t close to contending for a championship.

The NBA and the player’s union have had two years to create a new system that addresses those concerns but haven’t been able to make much headway. There’s blame to go around on both sides, although the league has taken a far more aggressive stance.

The good news, if that term can be used, is that the two sides say they will continue to talk over the summer. Billy Hunter, the head of the player’s union, also told reporters in New York that the union does not plan to de-certify like its NFL brethren, which leaves the dispute out of the courts. For now. All options are on the table and you can be sure that everyone involved is keeping an eye on the pending ruling from the 8th Circuit regarding the player’s lawsuit against the NFL.

There are two major differences between the leagues. The first is that while the NFL is making substantial revenue, the NBA claims that it lost as much as $370 million this past season and that 22 of its 30 teams were in the red. The union naturally disputes the accounting practices that led to those figures and questions how real those losses really are. The second is that the NFL operates under a far greater revenue-sharing plan among its teams based on their national television contracts.

The NBA player’s union has called for enhanced revenue sharing to offset the natural advantages enjoyed by big-market teams, but details have been scarce. The league has responded with a tighter cap that would offer cost-containment but doesn’t fundamentally address competitive balance.

What is known is that the NBA is proposing a massive restructuring that includes a hard salary cap – they call it a “flex cap” -- while the union is offering to take a cut from its share of basketball-related-income (BRI) that keeps the current system largely in place.

The last NBA proposal that was made public called for players to earn no less than $2 billion per season for the next 10 years – a slight cut from where they are now – with a “target payroll” (their words) of $62 million that includes some maneuverability in the form of Larry Bird rights and other free agent exceptions. The details of the exceptions have not been revealed.

The problem from the union’s side is that 10 years is a long time to be locked into a fixed salary structure and if the league’s revenues grow – as is expected with a new television contract in five years – then they won’t see much, if any, gain. Hunter estimated that the proposal would cost players $7 billion over the next decade. To the union, the flex cap is nothing more than a hard cap with a nicer name.

They proposed a five-year deal that cut the player’s share of the BRI by about $500 million over the length of the agreement. A report yesterday had the union going to six years with a $600 million cut in salaries. NBA Commissioner David Stern shot down that offer in a press conference on Thursday with a sarcastic aside that union lawyer Jeffrey Kessler said completely misrepresented their offer.

That’s a wide gulf and Stern noted that the league and the union are farther apart now than they were at the same time in 1998 when a lockout dragged into the winter and forced an interminable 50-game season into a tight timeframe.

Neither proposal is likely to get the job done so it’s impossible to predict what a future Collective Bargaining Agreement will mean for the Celtics next season – assuming there is one – and in the future. But they are well-positioned to adapt to whatever system is ultimately put in place because they will be able to clear more than $37 million in salary obligations with Kevin Garnett, Ray Allen and Jermaine O’Neal all in the final years of their contracts.

If the new system allows for free agent flexibility, they will look to add a player or players that won’t cut into their long-term cap space. Team president Danny Ainge was adamant about that in an interview with WEEI’s Dennis & Callahan after the draft.

“The challenge this summer is going to be to try to win a championship and to not jeopardize that cap space that we have for the following year,” Ainge said. “That’s going to be a real challenge for us. If there is some opportunity to do a good deal that might jeopardize our opportunity to start fresh, for lack of a better term. I think that that’s going to be the biggest challenge, that we maintain our patience and stick with the plan through that process.”

But all that is on hold. Some Doomsday scenarios have predicted lost games and even the loss of an entire season. Neither side will really start to feel the pressure until the early fall so there is still time. After a season that held so much promise, the NBA is staring into an uncertain abyss. Where it goes from here is anyone’s guess.

Greg and Chris talk with Mike Reiss from ESPN Boston in hour 2 of NFL Sunday to discuss a variety of offseason happenings with the Pats and throughout the league. Greg and Chris also get into the NFL Draft and where Mariota and Winston will go.

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Mut, Tomase, and Bradford kick things off talking about Shane Victorino taking offense to people reading into some comments he made about trading for Cole Hamels. They also discuss Blake Swihart and how soon he could be up if Christian Vazquez starts the season on the DL.

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The Sunday Skate crew gets the show going discussing the Bruins big, impressive victory over the NY Rangers yesterday. What can you take from that game? According to LB - Lyndon Byers - who called the guys from the road, not a lot. LB drops a dime on what was going on with the Rangers yesterday. DJ and Joe discuss Claude's lines and groupings and the importance of Ryan Spooner. They also get into Lucic, his contributions this year and if he can turn things around.

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